This table shows how to grow a small sum into a Million

Note: the average return on stocks may only be expected over very long periods of time. The three revenue methods shown involve different levels of risk.

Compound interest effects on 11.000€. As shown here, also a small sum can turn into a million. (Revenue Land)

As we can see above, by simply investing a one-off sum of money and letting it mature (it’s a bit hypothetical but let’s go on) I could turn 11,000€ into 1 million €, in 40 years. Not only have I earned interests, but I have earned interests on my interests.

“When people learn this formula normally think: “why haven’t I just started before?” Truth is : it’s never too late. Compound interest works for the rich and the poor, it works the same way on as little as 10€ or million euros”

What I report here is the result of ⏳ time, research and experiments I do myself. If you find it useful just share it. It’s a genuine way to say thank you, and it costs you nothing.

Yes, I share it!

Compound interest (2019): How to invest small sums (from 11k to 1Million)

Obviously the calculation in the table does not take into account certain factors such as inflation, and the fact that it is very difficult to obtain and maintain high and stable returns for such long periods without taking relative risks.

It’s a good idea, however, to start finding out how to get high returns right away. Let’s find out how other investors have applied these simple concepts in a broader strategy.

Magic Combination time/efficiency

Let’s do it with another simulation, a more realistic one.This time I can assume that I will not start my race to the million just with a small initial capital, but that in the coming years, I will save (to invest) X euros per month.

Here is a basic example of the magic of compound interest formula. 400€ per month plus 20k initial capital

Here is a basic example of the magic of compound interest formula. 400€ per month plus 20k capital.

Remember that the amount that I save and invest, and my time horizon, are only two of the three factors of the compound interest formula. The third factor is interest rate and is always tightly linked to the level of risk I am willing to face (for example, investing in equity rather than bonds, or peer-to-peer lending rather than savings accounts). Increasing the yield generally also increases the risk.

Mattress investing is risky

If I put my money under the mattress I would definitely lose value over time

That’s why I don’t consider my mattress (and some savings accounts) as a safe place at all.

A certain gradual loss is still a bad investment even if my intention is only to protect my capital from inflation.

Is hiding money under mattress still a good way to get richer? (or uncomfortable..)

How do I get high yields?

Nice question…

Some say that the stock market is the best place to invest in the long term. The reason lies in the fact that in the long term, equity yields between 5% and 10%, depending on how it is calculated (coupons or not, 10 or 20 years, etc.). The truth is that volatility is very high, and not all “ordinary Joe” is able to handle the stress that comes from the market fluctuations.

Finding the right timing is also an issue. All in all, big investors such as Warren Buffett have created such wealth. Their investment methods are not secret at all , but there is a lot to test and study before acting.

Peer to peer lending, while much less volatile than markets, is not risk free at all. An economic downturn, a legislative change and a bad portfolio set up, can undermine the success of the operation and lower returns.

I’m interested in P2P lending at the moment because of the high potential returns. I’ve studied the topic in depth to control risks where possible.

Even the formula of compound interest I used for these calculations is not secret. There is a free app to download from the app stores.

Test yourself the effect of this formula on your own numbers. Click on the image to go to the calculator page.

Test yourself the effect of this formula on your own numbers. Click on the image to go to the calculator page.

I try to spread my capital on different tools, mainly stock market and Peer to Peer lending, but also Real Estate crowdfunding and some cheap and effective ETFs. I am not a consultant, I simply report how do I do it and the path that took me here. Knowledge is key and I wanted to share it.

Time is the multiplying factor

IMPORTANT NOTE: The indications contained in this analysis are to be considered mere information tools and are not intended to suggest or promote any form of investment. The ideas, concepts and everything I write about, are simply my opinion based on what I have studied and almost always tried myself. I am not an investment adviser, nor do I aspire to be one.Read the full document on: revenue.land/disclaimer

NOTE: This is a personal blog on Financial independence and P2P lending.
Like everything I write about, I'm just sharing my ideas. You are solely responsible for your choices. The ideas, concepts and everything I write about, is simply my opinion based on what I have studied and very very often tried myself (my skin in the game). I am happy to answer questions and give help (not advice), but these answers are based only on what I would do on the limited information you have given me. I cannot and I don’t want to know the financial situation of my readers. This site and its communications do not provide all the information necessary to make an investment decision. All views are my own. I only talk about products, services and companies I like or use myself. I believe in transparency and trust. Some companies reported here may offer affiliate commissions, others don’t, but my opinion doesn’t change and this doesn’t prevent me to mention them.
I am not an investment advisor. None of the opinions and information in this email and on this site are to be considered as a solicitation for investment in Crowdfunding, P2P lending or any other security.
Read the full document on: revenue.land/disclaimer